SPSS inks software rights deal

SPSS Inc., a maker of data-analyzing software, on Monday said it has sold distribution rights for three of its scientific research products to California-based Systat Software Inc. in a deal worth at least $13 million.

SPSS received $9 million from Systat, a unit of India's Cranes Software International Inc., when the deal closed Dec. 29. The Chicago-based company expects to receive the remaining $4 million later this year and in early 2005.

An additional $1 million may come in 2007, when Systat has the option to buy the related intellectual property.

Along with distribution rights for SPSS' Sigma-series analytic software, the acquisition includes the products' customers and personnel. Roughly 20 people work for the Sigma product line, and most are expected to join Systat, said Edward Hamburg, SPSS executive vice-president and chief financial officer.

The Sigma software, which caters to physical science researchers, generated $6 million in sales in 2003--just a fraction of between $207 and $208 million in expected total sales, Mr. Hamburg said. SPSS doesn't provide official annual sales figures until February when its fourth quarter and full-year 2003 results are due.

Mr. Hamburg the Sigma products are in strong demand but do not fit with the company's core strategy of developing social science software that predicts human behavior. SPSS clients include retailers, banks, universities and government agencies.

The deal "tightens our strategic focus and strengthens our balance sheet," but also will lower revenues in 2004 and cut three to four cents from the company's earnings per share, he said.

The company sees 2004 earnings of 75 cents to 85 cents per share, on revenues of between $220 and $230 million. Analysts were expecting 86 cents per share, with a range of 79 cents to 92 cents, according to a Thompson First Call poll of five brokers.

SPSS shares rose 4.4%, or 81 cents, to $19.26 in early morning trading Monday, before declining to $18.89 by midday.